Philadelphia's Affordable Housing Challenges

Pathways to Housing PA
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Pathways to Housing PA provides housing services for people who have experienced chronic homelessness – and we are increasingly unable to find affordable units to rent for our participants.

What is affordable? 

The rate is calculated by the Office of Housing and Urban Development; Metro Philly explains in an article from March 3, 2024:

The U.S. Department of Housing and Urban Development, along with many state and local government agencies, use Area Median Income, or AMI, to set income guidelines for affordable housing programs.

AMI is calculated based on a metropolitan region, and Philadelphia’s median is $114,400 a year. For city residents, the actual median is about $57,000, though the inclusion of suburban counties, particularly Montgomery, Chester and Bucks, inflates the number. Programs typically limit participants to making a percentage of AMI, ranging from 30% to 120%.

So what does that mean for Philadelphians? 

The official Area Median Income (AMI) for Philadelphia is $114,000, which means that if you’re making the actual city median of $57,000, you’re making 50% of the AMI. Therefore, for a market-rate apartment at $2,500/month, you could only afford to pay $1,250.

The median rent in Philadelphia for a one-bedroom is $1,499, and a two-bedroom is $1,750, according to a December 2023 WHYY article. By those standards, the average Philadelphian can’t afford to live here. That’s why half of all Philadelphia renters are cost-burdened, with more than 30% of their income going toward housing and utilities.

Let’s take that a step further...

We know that issues like housing disproportionately affect people of color. In Philadelphia, where Black residents have made up the majority of the population for decades, rising housing costs have contributed to a 32% reduction in the Black population since 2000. The lack of affordable housing contributes to gentrification and pushes people out of their neighborhoods and, ultimately, out of the city.

Pathways Rent Anaylsis

Pathways has analyzed the average rents for our units over time. It shows that the average monthly rent in 2008, our first year of operation, was $650. That grew to $889 by 2022, a 36% increase over a 14-year period (2.6% per year). From 2022 to 2024, the average rent grew to $1,009, a 14% increase in just two years. That’s a significant change in a short time, posing significant challenges to our ability to provide Housing First services.

Experts estimate that Philadelphia needs an additional 60,000 units of affordable housing. In addition, with the 10-year tax abatement beginning to expire, the city will lose 1,700 units in the next five years.

We don’t have all the answers. But we will continue to fight to ensure that our participants are stably housed, no matter how challenging the affordable housing crisis becomes here in Philadelphia. 

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